It also expects Chinese demand to eventually pick up in the second half, which will bring more stability to metals prices. Additionally, Fitch sees lockdowns in China as also acting to restrict supply. China is the world’s largest producer of metals, which will eventually drive prices to a balance in the coming months.
Fitch’s macro team expects further contractionary readings in both Chinese manufacturing and nonmanufacturing purchasing managers’ indexes in the remaining two months of the current quarter.
“Further lockdowns, either district-wide or full, have been imposed in more than two dozen cities around the country, with the capital Beijing having undergone three rounds of mass testing since late April. We continue to see downside risks to our 4.5% growth forecast for 2022, depending on further developments around lockdowns,” said Fitch.
The analyst expects continuing loose fiscal and monetary policy in China…
